• Korea Trade Review
• /
• v.46 no.2
• /
• pp.177-191
• /
• 2021

Based on the existing OFDI (outward foreign direct investment) literature, this study endeavored to verify how the corruption of host countries affects the partner strategy of EMNEs (emerging multinational enterprises) when EMNEs enter global markets through joint ventures. Following the existing literature, this study classified corruption and partner strategies into two categories, respectively. First, the corruption of host country was divided into grand corruption and petty corruption. Second, EMNEs' joint venture partner strategy was divided into home country partner joint venture and host country (i.e., local) partner joint venture. Our hypothesis suggested that the greater the host country's grand corruption, the more EMNEs would choose the host country partner, while the strong petty corruption leads to the preference of home country partner in host country. The hypotheses were verified with a sample of 890 foreign direct investment cases of Chinese multinational companies from 2005 to 2015. As a result of the study, regardless of the degree of corruption, it was found that they prefer joint ventures with home country partners when EMNEs enter the global market through joint ventures.

• Journal of Korea Port Economic Association
• /
• v.20 no.2
• /
• pp.275-288
• /
• 2004

The rising of east-north economic bloc is notable in world economy due to the rapidly growth of china economy. The China's economic standing is gradually higher and higher because the joining of the WTO at 2001, development of the exterior open-door policy and the expansion of the trade between chain and several nations. Since Korea and China normalized diplomatic ties in 1992, the two have made remarkable progress in bilateral relations in the fields of economy and diplomacy in particular. The amount of Korea's trade with China has increased by over 20% a year on the average because of the development of the economic cooperation of Korea and China. That is to say, China was sixth trade partner by the end of 1993, based on the amount of trade. But China became third partner at 1993, second partner at 2003 and first partner at the first half of 2004, based on the amount of trade. Korea can not trade with China from the Korea's port opening period to Cold War period after second world war. But historically, the two countries have shared a active and long history of trade relations from the ancient times up to now. This is because two countries get near geographically and two countries have a implication of history and culture. Not only had Korea trade with China at prehistoric age, but also at BC 7. We knew that Korea had traded with China very actively at ancient times through the Paekje(Korea's ancient country) people's village at Santung province and Changbogo's trade works. Korea-china trade relation has played an important role for the development of world economy. Therefor, based on reviewing the korea-china trade, I study the historical meaning of the trade at the region of east-north asia.

• Journal of Korea Trade
• /
• v.23 no.6
• /
• pp.145-158
• /
• 2019

Purpose - Alliance members have constantly revised market strategies over time by withdrawing membership from a current alliance, joining another alliance, or constructing a new alliance. From the perspective of the signaling effect, the purpose of this study is to analyze the impacts of partner volatility (new member, old member, and new group) on firm value. Design/methodology - To analyze the impact of partner volatility on firm value, companies in strategic alliances are classified into the three groups of new partner, existing partner, and new alliance, and the effects on company value are verified through an event study and the signaling effect analysis. Findings - This study proved that new partners and newly formed strategic alliances have higher expectation effects than old partner company groups, and have a more positive effect on the relevant firms' stock prices. In addition, the result of the study showed the same valid results as the alliance levels, and showed that investors' expectations were higher with new partners and new alliances than with old partners. Research Implications - A new perspective on the signaling effects of strategic alliances among shipping lines was presented in this study by grouping alliance types including new member, old member, and new group. The results provide useful insights for selecting partners and firm values of alliance announcement times. Originality/value - This study analyzed partner volatility on relevant companies' stock prices from the perspective of investors from the global shipping conference reorganization in 2017. Strategic alliances were classified into the three categories of new partner, old partner, and new alliance, and the effects on firm value were verified.

• Korea Trade Review
• /
• v.44 no.1
• /
• pp.253-268
• /
• 2019

This paper analyses the characteristics of partner countries when multinational firms of Korea, China, and Japan make greenfield FDI in foreign countries. Particularly, this paper applies the gravity model for greenfield FDI flows for the period 2003-2017. This paper finds that multinational firms of Korea, as compared to those of China and Japan, are very significantly and negatively responsive to political risks of partner countries. In contrast, multinational firms of Korea as well as those of China and Japan tend to make greater amounts of greenfield FDI in financially high-risk countries. This result indicates that multinational firms from these three countries should take financial risks of partner countries into more serious consideration.

• Korea Trade Review
• /
• v.46 no.2
• /
• pp.161-175
• /
• 2021

The purpose of this study is to empirically analyze the effect of cultural distance between partner firms on international joint venture performance, focusing on the moderating effects of the conflict resolution techniques and the competitive relationship between partner firms. We tested hypotheses based on joint venture firms that were surveyed which formed by equity investment between Korean and foreign firms in the manufacturing industry. The empirical analysis results of this study are as follows. First, in international joint ventures, the cultural distance between partner firms was found to have a negative effect on the international joint venture performance, and the higher the cultural distance, the lower the joint venture performance. Second, it was found that constructive conflict resolution techniques weaken the negative impact of the cultural distance between partner firms in international joint ventures on the performance of international joint ventures. Third, competitive relationship between international joint venture partners showed no moderating effect on the relationship between cultural distance and international joint venture performance.

• Journal of Korea Trade
• /
• v.25 no.3
• /
• pp.134-152
• /
• 2021

Purpose - Our study aimed to examine the roles of conflict management in maintaining a sustainable good relationship between joint venture (JV) partners. Although the concepts of relational capital, mutual commitment, and cultural adaptation have been neglected in previous research on interorganizational relationships, we treated them as inter-partner fit mechanism capabilities of affecting the level of satisfaction in a relationship with a JV partner. Design/methodology - In order to test hypotheses, we sent a questionnaire to Japanese firms operating JVs in South Korea and asked whether their levels of satisfaction with their JV partners increase when conflict management techniques are used to reduce the conflicts that usually arise between partners. Findings - The results of our study suggested that it is important for firms participating in a JV to construct and reinforce an inter-partner fit mechanism that enables them to maintain a favorable partnership. In addition, we suggested that relational capital, cultural adaptation, and mutual commitment influence conflict reduction and the level of satisfaction experienced in JVs. Moreover, the results showed that conflict management has a significant effect on developing soild partnerships and performance in JV situations. Originality/value - We advanced a new paradigm about conflict management and suggested methods of research propositions that are well grounded in the latest findings in conflict management research pertaining to JVs.

• Asia-Pacific Journal of Business
• /
• v.14 no.1
• /
• pp.341-350
• /
• 2023

Purpose - How are gains from trade distributed between countries when economic integration is achieved through free trade? The purpose of this paper is to answer this question. Design/methodology/approach - This study attempts to address the issue of distribution of trade gains between participating countries following economic integration in terms of positive economics. The analysis is therefore based on a theoretical methodology. Findings - First, commodity prices fall and consumer surplus increases in both large and small countries. Second, when economic integration into free trade is achieved, gains from trade always exist in small countries. However, the size of trade gains depends on the degree of difference from the market size of the partner country, the large country. However, the size of the gains from trade depends on the extent of difference between the market size of the large country. If the market size of a large country is much larger and there is a large difference, trade gains will be very large, whereas if the market size is similar, profits of domestic firm will decrease. Therefore, in that case, the size of the gains from trade becomes relatively small because only the gains from exchange exists. On the other hand, in a large country with a large market size, there is a possibility of trade gains only when the market size is similar to that of a small country, which is a trading partner. However, if there is a large difference in market size, the decrease in profits of domestic firm is relatively larger than the increase in consumer surplus due to trade, and rather, a trade loss occurs. Research implications or Originality - Our analysis contributes to filling the gaps in the literature regarding the distribution of gains from trade, and from a policy point of view, it is meaningful in examining the impact of market size, an important variable considered in regional economic integration of countries.

• Journal of the Korean Society for Aviation and Aeronautics
• /
• v.29 no.3
• /
• pp.111-116
• /
• 2021

This study aims to identify the representative factors affecting the air trade between the two countries over the past 20 years, targeting China, Korea's largest trading partner for air transport. In the analysis, the two countries' GDP, GDP per capita, and tariff rates, as well as exchange rates, international oil prices, and FTAs were used as variables. For the analysis method, OLS multiple regression analysis was performed, and each was analyzed by dividing the export amount, import amount, and trade amount. As a result of the analysis, China's GDP and Korea's GDP per capita showed a positive (+) direction, an increase in the exchange rate resulted in an increase in the amount of trade, and an increase in the tariff rate resulted in a decrease in the amount of trade. Whether the FTA was concluded or not acted as a factor in increasing the amount of trade between the two countries.

• Korea Trade Review
• /
• v.47 no.4
• /
• pp.1-14
• /
• 2022

This study examines the impact of trade facilitation on China's trade for the period 2010-2017 using a gravity model with a measurement of APEC trade facilitation through principal component analysis. The empirical results confirmed that trade facilitation was a key factor to have a positive effect on Chinese exports and that the higher the level of trade facilitation in APEC countries, the more positive the increase in exports and quantities with China. Further, the size of the economy, the total population, and the border between the trading partner had a positive effect on Chinese trade volume. To promote economic growth through increase in trade volume, countries should actively improve trade facilitation and participate in global trade facilitation reform through continuous cooperation with trading partners.

• Journal of Korea Trade
• /
• v.25 no.3
• /
• pp.1-20
• /
• 2021

Purpose - The purpose of this paper is to examine the welfare effects of standards harmonization between technologically asymmetric countries, and to determine optimal harmonization strategies for a country with mid-level technological advancement. Design/methodology - Following Salop's circular city model (Salop, 1979), this study constructs a simple, horizontally-differentiated oligopoly model in which three firms and three countries exist. Each country adopts different compatibility standards and each firm incurs conversion costs for foreign market access due to differences in standards. The conversion costs are related to technology; standards harmonization removes these costs between participating countries. The paper considers three cases: i) no harmonization; ii) harmonization with the more technologically-advanced country and iii) harmonization with the less technologically-advanced country. Findings - The paper first considers a scenario in which all three firms occupy some share of the market in each country. It shows that standards harmonization with both the technologically moreor less-advanced country always increases consumer surplus and social welfare. In addition, the producer surplus will increase if the harmonization partner has a higher technology level, whereas it may decrease if the partner has a lower technology level. It also shows that if most domestic export goods are in sectors with conversion costs above a certain level, harmonizing standards with a technologically more-advanced country should be prioritized. Such strategies, moreover, should be emphasized when there exists a large technology gap among countries. Lastly, the paper considers another scenario, in which harmonization leads to the foreclosure of the non-member firm from the member countries' markets. It shows that harmonization improves the social welfare of a mid-level technology country regardless of its partner's technology. It also shows that the country should prioritize harmonization with the technologically less-advanced country. Originality/value - Though some of the existing studies consider the welfare effects of harmonization, their main assumption is that firms have the same conversion technology. Since complying with standards often requires substantial technological advancement and technical expertise, harmonization of compatibility standards between countries with gaps in technological ability carries different implications. This paper investigates the welfare effects of this harmonization and determines an optimal harmonization strategy while considering technological asymmetry among countries in standards compliance.